Dow Jones Up As Powell Gives That Recession Warning; Bitcoin Crashes Again; 3 Eye stock points


The Dow Jones Industrial Average rose even after Federal Reserve Chairman Jerome Powell issued a recession warning. Bitcoin was falling again, with Coinbase (CURRENCY) and Riot Blockchain (RIOT) also tumbling. Apple (AAPL) rose after a bullish call from analysts.

With the market in turmoil, now is the time to build your watch list. Legend Biotech (LEGN), Novo Nordisk (NVO) and Johnson & Johnson (JNJ) all show strength as they watch buying points.


Volume was split, up on the Nasdaq and down on the New York Stock Exchange from the same time on Tuesday.

Meanwhile, the yield on the benchmark 10-year Treasury slipped 16 basis points to 3.15%. West Texas Intermediate crude fell about 3% to trade at around $106 a barrel.

Powell issues recession warning, targets inflation

Fed Chairman Jerome Powell showed composure as he faced intense scrutiny in the first of two appearances this week before Congress.

Still, he told the Senate Banking Committee that it’s “certainly possible” that the central bank’s attempts to fight inflation could lead to a recession.

Powell said the FOMC is “not trying to provoke and don’t think we’ll need to provoke a recession.” But he said having runaway inflation is “absolutely essential”.

Since soaring fuel prices and supply chain issues are beyond the Fed’s ability to control, it is important that rate hikes do not have unintended consequences.

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Powell said achieving a so-called soft landing “is going to be very difficult. It’s been made much more difficult by the events of the past few months.”

Oanda senior market analyst Edward Moya said the Fed chief once again charmed the markets with his tone at the meeting.

“Stocks rallied after Powell said the Fed will need to be nimble in responding to incoming data and changing outlooks,” he said in a note to clients.

Nasdaq up; High Inverted Small Caps

The Nasdaq fared the best among the major indices, although it was up less than 1%. Modern (MRNA) stands out with a gain of more than 6%.

The S&P 500 rose about 0.6%. Clorox (CLX) was shining here as it rose almost 6%.

S&P 500 sectors were mostly positive. Real estate and healthcare are among the best performing sectors. Energy lagged as oil prices fell.

Small caps managed to reverse higher, with the Russell 2000 posting a fractional gain of 0.2%.

Growth stocks were the bears’ favorite feasting ground on Wednesday. The Innovator IBD 50 (FFTY) ETF fell around 3%.

Dow Jones Today: Apple Stock Rising After Bullish Call

The Dow Jones Industrial Average also rose. It was off session highs but still gained 0.5%.

Apple stock rose 0.5%. It is struggling to gain ground as it seeks to retrace towards its 50-day moving average, according to MarketSmith analysis.

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It was little changed despite Morgan Stanley reiterating its overweight rating on Apple shares. He said “the measured lifting of Covid-related restrictions in China in recent weeks has helped production of Apple’s Macs and iPads.”

UnitedHealth (UNH) was shining here as it rose more than 2%. Dow Inc. (DOW) lagged, falling almost 5%.

Bitcoin falls again after attempted rally

Bitcoin was falling again after Tuesday’s attempted rally. This suggests it was just a dead cat bounce.

Bitcoin traded just over $20,000 after losing around 4% in the past 24 hours, according to CoinDesk. The cryptocurrency has been rocked as investors run for the exits as they dump risky assets.

Bitcoin games were struggling badly. bitcoin miner Riot Blockchain (RIOT) slipped nearly 9% as it moved away from its 50-day line.

Cryptocurrency exchange Coinbase global (COIN) fell almost 7%. It is also under pressure due to a move by rival Binance.

Both stocks remain miles off their all-time highs. The Grayscale Bitcoin Trust (GBTC) also fell, although its nearly 4% drop was more moderate.

Market rally seeks direction; Five Hot Sector Stocks

Outside of Dow Jones: 3 stocks dip near buy points

The relative strength line is a key indicator when researching watchlist names. A trio of stocks are hitting new highs in this important benchmark.

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Legend Biotech saw its RS line reach new highs on a weekly chart. We are now getting closer to a cup with a 50.10 inlet handle.

Big Money has been piling up in the stock lately. And while earnings are lackluster, its price performance has been outstanding lately.

Diabetes treatment company Novo Nordisk also seems optimistic. He is aiming for a consolidation buy point of 122.26. It holds a solid EPS rating of 77 out of 99. The relative strength line also looks robust.

Johnson & Johnson stock also saw its RS range hit a new high. J&J stock is forming a flat base with an ideal entry of 186.79. Stocks rebound after finding support at the 200-day line. It is now moving back towards its 50-day moving average.

Dow Jones stock is in the top 10% of stocks by price performance over the past 12 months.

Please follow Michael Larkin on Twitter at @IBD_MLarkin to learn more about growth stocks and analysis.


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